Investor optimism fuels sharemarket winning streak

AUSTRALIAN shares continued their supercharged rally this week, driving closer to the elusive 5000-point level, as investors continued to chase high-yielding stocks.

The ASX started February with a bang after a jump in iron ore prices helped the miners surge higher on Friday, with BHP Billiton gaining 1.2 per cent, and Rio Tinto 1.3 per cent. But analysts have cautioned that the market is due for a pull-back, after January saw the longest winning streak on the S&P/ASX 200 Index in more than a decade.

The market defied global trends on Friday after strong US earnings helped the market close at its highest level since April 11, 2011.

CMC Markets chief strategist Michael McCarthy said local investors were feeling more optimistic after a strong showing from US corporates. ''We've had a much more positive season in the US and that I think has got local investors more optimistic about the earnings outlook,'' he said. ''We've also got a lot of people who are more overweight [in] cash and they've seen their neighbours earn a lot on the market and they're getting a bit nervous about not being in it.''

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At 5pm on Friday, the Australian dollar was trading at US103.99¢, down from US104.06¢ on Thursday.

On Friday, Aquila Resources was steady at $3.12 after the company got the green light from the West Australian government to develop Anketell Port as part of its $6 billion iron ore project.

Brickworks slipped 2¢ to $12.60 after the company said it expected a rise in its first-half earnings after selling a parcel of its land in western Sydney to a trust it part owns with property developer Goodman Group.

Cabcharge rose 1¢, at $4.93, after the taxi payments operator bought Queensland taxi company Maxi Taxi for less than $5 million.

Kathmandu Holdings rose 8¢, at $1.85, after the adventure wear retailer upgraded its profit forecast after better than expected sales in the first half of the financial year.

Pharmaxis rose 3.5¢, at 71.5¢, even though it had $175 million wiped off its market value after a setback in getting its cystic fibrosis drug approved for use in the US.

Qantas Airways was up 1¢, at $1.54, as unions made a last-ditch plea to the consumer watchdog against a controversial partnership between Qantas and Emirates.

Virgin Australia shed half a cent, at 42.5¢, after Tiger Airways shareholders approved Virgin's plan to buy a major stake in the budget airline.

Westfield Group rose 11¢ to $11.29 after the shopping centre developer said it expected to pay its security holders a distribution of 24.75¢ for the first half of the 2012-13 financial year.